“We’ve had a lot of Malaysian start-ups that have been funded and that have become national champions, but they have stayed within the local market and are comfortable within their revenue performance,” explains Nazrin Hassan, chief executive officer at Cradle Fund Sdn Bhd.
“They (entrepreneurs) have not really looked at going beyond our borders to leverage on the opportunities that the region presents. The tech community over here needs to be a bit more keen in their regional awareness, networking and collaborations.”
He adds that another possible reason for the lack of interest amongst Malaysian start-ups to expand overseas could be because they are uncertain over how to penetrate new markets.
“What you don’t know tends to scare you,” says Nazrin. “What we’ve seen in our Coach and Grow Programme (CGP) is that more than 60% of start-ups actually start their regional foray immediately during their coaching period. There is perhaps desire there, but a lack of know-how and know-who prevents them from going forward.”
However, he feels that a lack of funding ought not to be among the causes for delaying an overseas expansion.
“For early stage funding, Malaysia has funded more people more generously than the other countries in the region, I dare say,” Nazrin says. “But if you’re talking about later stage funding, then yes, there’s a bit of a crunch there because we have less venture capital players now as opposed to 10 years ago. Everybody’s moving to private equity, but that’s a global trend.”
Moving into mobile
Meanwhile, Thaddeus Koh, co-founder and chief operating officer at Singapore-based regional technopreneur resource platform, e27 feels that the trend amongst Asian entrepreneurs nowadays is towards mobile solutions.
“Mobile companies represented more than 50% of the companies who participated in Echelon last year. We see this trend continuing. It’s the same trend as seen in more developed countries,” he says.
In general, Koh notes that currently, many mobile solutions are going the social route, and he cites examples such as mobile messaging apps like Whatsapp and LINE.
But he points out that entrepreneurs across the region are now realising that merely building a mobile app is not enough to sustain a business. As a result, they are focussing more efforts into developing sophisticated business models to support the mobile services they offer.
“The good part is that we (Asian entrepreneurs) are creating our own business models that make sense for this region,” Koh says, bringing up the LINE sticker feature as an example.
“This is a very encouraging trend. We are creating a new wave of Asian technology innovation rather than just bringing in what’s successful in the European or American markets. We are taking that and evolving it (to suit the local market).”
Echelon Satellite 2014
As part of its efforts to stimulate Asian technopreneurship across the region, e27 organises the Echelon conference and trade exhibition to help connect budding technopreneurs with foreign investors.
The Echelon Satellite 2014 event was held yesterday at Cyberview Resort and Spa, Cyberjaya and saw 20 Malaysian start-ups pitching their ideas to a panel of five judges. Out of these 20, one will be chosen as the Malaysian Satellite winner. A separate People’s Choice Award will also be presented to a deserving start-up.
Similar events will be held in 11 other Asian countries over the next few months. Winners from the Echelon Satellite events will then be invited to attend the Echelon exhibition in Singapore on June 10-11.
This is the third time that such an event is being held in Malaysia. A total of 300 applications were received across the region this year, and out of that, 180 applicants will be pitching their ideas during the 10 Echelon Satellite events.
“It is a simple scoring system. We’ll look at their revenue model, the potential of the business and how scalable they are. We’ll also look at their team: the founders and how well versed they are in the industry,” explains Koh.
“The judges will award scores to the companies and then gather and discuss to select two winners. A lot of subjective opinion is needed. The score is just a number, it is not the ultimate guideline.”
For more information on Echelon 2014, visit http://e27.co/echelon/.